Effective 10/01/12 PECO generation supply charges for commercial and residential tenants have increased between 9 and 12 percent effective with billing generated after 10/01/12. Cathy Engel Menendez, a spokeswoman and public relations representative for PECO, stated that the sharp increase was mostly caused by the utility’s under-collection of revenue in the summer quarter of this year. She said the utility projects that rates could decrease again in January of 2013.
According to PECO, the average monthly usage for a general services commercial user is around 4,530 kilowatt-hours which currently costs about $700 a month. PECO stated that the average small commercial consumer will see a $75 increase in their monthly electric bill (around 10%).
According to PECO, the average monthly usage for a residential user is around 750 kilowatt-hours which currently costs about $118.27 a month. Residential users will see an average increase of about $15 a month (also about 10%).
Future increases or decreases to generation supply rates will continue on a regular basis, based on the market price to purchase electricity. PECO stated that the price it charges residential electric customers, called commodity charges, are based on procurement contracts that the utility is able to sign with the electric companies that generate power. The long-term residential generation supply contracts are based on structured market-based auctions. However, PECO’s commodity charges for commercial and industrial customers are more volatile than for residential customers because they’re more dependent on short term spot market electricity prices and can fluctuate more dramatically each quarter.
While PECO’s electric supply rates can increase quarterly for all its customers, the electric utility’s distribution charge (the fee that the utility charges to deliver electricity to all of its customers, regardless of where they buy their electricity) is regulated by the Pennsylvania Public Utility Commission, which must approve any increase. The distribution charge is where PECO makes its profit, and reflects the costs PECO incurs to maintain its wires, poles, and customer service system. Since January 1st 2011, we have seen a very small increase in PECO distribution charges.
Supply generation charges are expected to continue to fluctuate each quarter in the future.
For more information, visit www.pecoanswers.com